- Parkway Life REIT’s full-year distributable income increased by 2.3% y-o-y to S$91.4mil with a 1.0% increase in Parkway Life REIT's DPU to 14.92 cents. Excluding the impact of EFR due to the enlarged unit base, FY24 DPU would have been higher at 15.11 cents.
FY24 results largely in line with DBS and consensus estimates.
- - Read this at SGinvestors.io -
- - Read this at SGinvestors.io -
S$0.5mil provision likely one-off.
- We note that 2H24 net property income included a S$0.5mil allowance for doubtful debt, as an operator (KK MCS) of two nursing home properties (Sanko and Kikuya Warakuen) in Japan defaulted on rental receivables – this contributes 0.7% to overall income. Parkway Life REIT is taking a prudent approach by fully provisioning for this year, and this has already been factored into the 1% rental growth projection for the Japan portfolio.
- Management highlighted that they are in the process of recovering the rental arrears, though any recovery would be considered a bonus. A replacement operator has been found (benefit of a mature market), so the operational impact is expected to be minimal.
- Past performance indicates that this is not a structural issue, as only two to three similar cases have occurred in the last 17 years.
Highly visible & stable earnings
- Read more at SGinvestors.io.
